Vermont governor opposed to receiver in ski resort fraud

Gov. Phil Scott said Thursday he opposes having a receiver appointed to run the troubled Vermont center that helps foreign investors get U.S. residency in exchange for investments in job-creating economic development projects in the state.

Scott, a Republican, was responding to a call made earlier Thursday by the attorney for five investors in a ski resort who are suing the state for fraud, claiming state officials made fraudulent claims about the center. Attorney Russell Barr said he has asked a court to appoint a receiver to protect his clients.

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Barr said the state is arguing it should be immune from lawsuits and has refused to turn over internal documents that could shed light on what took place at the center, which works with potential investors from across the world.

"Now we have asked for a receiver, an independent and experienced expert in immigration and securities law, to bring accountability" to a state center that's supposed to operate "according to the promises made to investors," Barr said during a press conference at the Vermont Statehouse in Montpelier.

Scott said he's following the recommendations of state Attorney General T.J. Donovan, whose office is defending the state in Barr's lawsuit.

"We are in a number of different suits at this point, both proactively and defensively, and so I think it's best to allow the information to come out as we can without jeopardizing the cases that we're involved in," Scott said.

Last year, leadership at the Jay Peak ski resort was accused of misusing more than $200 million raised from foreign investors through the EB-5 visa program, which can lead to U.S. residency for people from other countries who invest in certain economic development projects. Barr's lawsuit accuses the Vermont EB-5 Regional Center, which helps manage some of the projects in the state, of being partners in fraud with Jay Peak.

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Vermont is closing the center. The federal government has said it no longer serves the purpose of promoting economic growth by failing to properly manage, monitor and oversee EB-5 projects.

Barr said he'd like to expand the lawsuit into a class-action so it can cover more Jay Peak investors.

The state is asking a judge to rule its employees are immune from the lawsuit. The request is pending before a Superior Court judge in Hyde Park.

As proof of fraud, Barr pointed to a promotional flyer for the program that was undated but carried the name of former Vermont Gov. James Douglas, a Republican, who left office in 2011 after eight years in office. The flier said EB-5 investors were protected by "the credibility of the State of Vermont" and that investors would get higher priority from the federal government in processing the paperwork to win permanent, legal residency in the United States.

But Barr also provided a 2010 email from U.S. Citizenship and Immigration Services that said Vermont center petitions for residency are not given higher priority than petitions from other EB-5 programs.

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This story has been corrected to show the lawsuit is not a class-action lawsuit.